Sheath blight disease in rice, induced by the necrotrophic basidiomycetes Rhizoctonia solani, has emerged as a significant menace to global rice cultivation, especially with the widespread adoption of high-yielding varieties. The pathogen’s capacity to endure unfavorable conditions and its wide host range contribute to the increased challenge for management. The occurrence of sheath blight in rice is intensified when high-yielding semi-dwarf cultivars are employed, coupled with dense planting and the application of substantial amounts of nitrogenous fertilizers. Managing this pathogen is a formidable challenge due to its broad host range, substantial genetic variability, and the absence of satisfactory levels of natural resistance in the existing rice germplasm. Due to the absence of complete resistance sources, the predominant approach for managing sheath blight has been through chemical control methods. It is imperative to explore solutions to combat this pathogen, in order to reduce rice yield losses and safeguard global food security. Developing genetic resistance provides an alternative to the use of potentially harmful chemical fungicides. This review crucially delivers efforts to enhance the understanding of the host–pathogen relationship, which involves identification of gene loci/markers associated with resistance responses, modification of host genome through transgenic approaches, examining the wide host range, epidemiology and its managemental approaches. Recent advancements and current research on the R. solani–rice pathosystem, along with a gap analysis, are presented.